Stalwart Esports Move To Crypto Raises Questions – So We Spoke to a Lawyer to Learn More
However, when we implored him about the future consequences if the Indian government decides to ‘regulate’ the crypto space, Subbaiah stated, “‘Regulate’ is a very euphemistic term to use here – it’s still looking like India’s parliament is going to ban all private Cryptocurrencies, but there’s some hope in the market and its allied lobbies currently that some form of ‘calibrated’ approach will be preferred; it’s all conjecture currently and anyone’s guess.”
In April 2018, the RBI issued a circular instructing banks to deny banking services to customers or entities dealing with virtual currencies like Bitcoin. However, on 4th March 2020, the Supreme Court of India struck down this circular legally enabling cryptocurrency transactions once again. However, the Indian government is reportedly working on a bill titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, which will prohibit all private cryptocurrencies within the country.
“If India continues on this path that it’s on to ban all private Cryptocurrencies, the organization will need to wind down or completely stop its operations of using Cryptocurrency(ies). If it’s a globally issued and accepted Cryptocurrency, the players will nevertheless be able to use such Cryptocurrency that they were paid in as long as it isn’t illegal in their own country(ies),” Subbaiah added.
He also expressed concerns about Tether (USDT), a stable cryptocurrency that Stalwart Esports is planning to use for its balance sheets, at the moment. “It appears that Stalwart is only trying to use USDT for now (officially known as Tether) – a ‘stablecoin’ that is pegged to the value of the US Dollar (USD), therefore marketed to be less volatile unlike other Cryptocurrencies,” said Subbaiah.
He added, “Of course, Tether has had its own share of issues, primarily around questions of (1) whether it actually holds reserves of USD based on which it issues USDT (the ratio is supposed to be 1:1 but that’s not currently the case); and (2) whether it has any legal obligation whatsoever to provide owners of USDT with USD if they so request. The answer to both questions is ‘no’.”
Stalwart Esports is also planning to issue fan tokens by partnering with a crypto exchange. Globally, multiple esports organizations like Na’Vi, OG and Vitality have also issued fan tokens stating that it would help them engage with their fans.
Subbaiah commented on this matter by stating that the value of Stalwart’s fan token is going to be tricky to determine. He added, “We’re going to need to read the Whitepaper to understand exactly what they have in mind, but in essence, it would be akin to AFK Gaming issuing ‘AFK points’, which can be traded, redeemed, et cetera – could one possibly buy some bread with AFK points? Only if a baker is willing to part with bread for AFK points. It will boil down to whether the market values it as a form of currency.”